Alphabet, the parent company of Google, has made a significant decision to acquire the data centre energy group Intersect Power for approximately $5 billion. This strategic move aims to enhance Alphabet’s power generation capabilities, particularly as it accelerates the development of advanced artificial intelligence technologies.
The announcement was made on Monday, with Alphabet’s CEO, Sundar Pichai, emphasizing that the acquisition of Intersect will enable the company to expand its capacity and improve operational efficiency when it comes to building new power generation. Pichai stated, “Intersect will help us expand capacity, operate more nimbly in building new power generation in lockstep with new data centre load, and reimagine energy solutions to drive US innovation and leadership.”
Intersect Power, which has the backing of private equity firm TPG, specializes in developing infrastructure that includes renewable power sources tailored for data centre environments. The acquisition consists of a cash payment of $4.75 billion, along with the assumption of debt, indicating Alphabet’s commitment to increasing its access to power at a crucial time when it is competing with other tech giants like OpenAI, xAI led by Elon Musk, and Meta in the race to train energy-intensive artificial intelligence models.
As these competitors seek various avenues to enhance their energy supply—whether through grid access or on-site power generation—Alphabet’s investment in Intersect aims to solidify its position in the sector. The company noted that the deal is part of its ongoing commitment to work with utilities and energy developers to ensure a reliable, abundant, and affordable energy supply that is necessary for expanding its data centre infrastructure.
Interestingly, Alphabet had previously taken a minority stake in Intersect last year, setting the stage for deeper collaboration focused on developing energy plants for data centres. As a result, the acquisition will also encompass the existing assets and workforce of Intersect that align with this strategic vision. However, it is important to note that Intersect’s assets valued at $15 billion, which are currently operational in the U.S. or in the midst of construction, primarily located in Texas and California, will not be part of this deal and will retain the Intersect brand.
